The barriers to entry existing in many industries and the need for increasing size to achieve efficiency may have led to profits higher than normal under perfect competition.

Question

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Barriers to entry, such as high startup costs or government regulations, restrict the number of firms in an industry and limit competition, allowing existing firms to earn higher profits. Larger firms may also have economies of scale that allow them to produce at lower costs and achieve higher profits. These factors can result in profits higher than what would be expected under perfect competition.

The Barriers to Entry Existing in Many Industries and the Need